Credit Suisse Group AG (NYSE:CS) shares plummeted on Monday afternoon after the Financial Times said the lender’s executives have been in talks with major investors to reassure them amid worries regarding its financial health.
The bank was actively engaging with its top clients over the weekend, insisting they had received “messages of support” from big investors, one executive involved in the talks was reported as saying.
Credit Suisse has also been in talks with investors to raise capital, Reuters reported, citing people close to the matter, including the chance that the lender may “largely” exit the American market.
The executive insisted the bank had not formally approached the investors about more capital, saying Credit Suisse “was trying to avoid such a move with its share price at record lows and higher borrowing costs due to rating downgrades”.
Its shares were changing hands 7.2% lower, at 3.69 francs, on the Swiss exchange on Monday afternoon, with the bank losing almost 60% of its market value in the year to date.
Earlier on Monday, the shares had dropped as much as 12% in Zurich to a record-low of 3.52 francs.
John Vail, chief global strategist at Nikko Asset Management, commented: “The silver lining at the end of this period is the fact that central banks will probably start to relent some time as both inflation is down and financial conditions worsen dramatically.
“I don’t think it’s the end of the world.”
Credit Suisse said it is in the process of a strategy review, which would likely include asset sales and divestitures.